Part Three

The Four Imperatives of Successful IoT

A study from the John M. Olin School of Business at Washington University estimates that 40% of today’s Fortune 500 companies on the S&P 500 will no longer exist in 10 years. We have emerging technology to thank for this – 73% of enterprises believe disruption to their industry will be driven specifically by IoT (Gartner).

The promise of IoT is vast; so, too, are the multitude of ways in which this technology can be employed. In 2018, 70% of Fortune 100 companies were innovating with IoT technology – Cisco created Smart Grid technologies, Rolls Royce optimizes jet flight patterns, and both Google and GE have been dabbling in IoT for years.

Suffice it to say that there’s no single blueprint for creating a successful IoT ecosystem. But when your options are hope for the best or get busy innovating, where do you start?

Find the Signal in the Noise

It’s imperative that companies begin by asking the right questions. Jeff Bezos said it best when he stated, “I very frequently get the question, ‘What’s going to change in the next 10 years?’.I almost never get the question, ‘What’s not going to change in the next 10 years?’.”

Key Insight

The inability to prioritize IoT leads to insufficient investments that focus on incremental wins that augment or optimize an existing product or process. These single use case business solutions, such as attaching a dashboard to product, rarely achieve the full potential of IoT.

Source: Peter Hapak

This is the difference between a strategy and a vision. You must find your company’s signal in the noise, and create a shared vision around those industry factors and consumer needs that will always stay the same. This is how you prioritize ideas and ensure you’re making smart investments in your company’s future.

When companies fail to set a unified vision, they push IoT strategies that attempt to address too many problems at once. The managers in charge of such initiatives will not feel equipped or empowered to make the deep organizational changes that are required for success. This often makes IoT look like “yet another IT project” or a political power grab by one department or another, instead of an opportunity to truly evolve as a company.

Additionally, the resulting incrementalism of this approach leads to “random acts” of IoT that fail to live up to the awesome potential of this technology – and that’s if these projects even make it past the near-inevitable prototyping purgatory, in which nothing ever gets launched. These kinds of isolated projects look like progress, but they don’t produce results or lay a proper foundation for the future. They do, however, lead to a predictable result: Death by 1,000 cuts. And this, more often than not, leads the company to entirely abandon their IoT efforts and their greatest chance of outlasting disruption.

Put Data at the Center

So how do you avoid the trap of ‘random acts’? In order to embrace the full power of IoT, companies must rethink how they collect and use data. It can no longer be viewed as an afterthought; collecting and analyzing data to drive your company forward must be your new strategy – the means through which you gather it becomes your products and services, and new data-centric revenue streams offer extremely efficient gross margins.

Consider a CPG company with $2B in revenue and a 15.0% net income that introduces $50M in new data monetization revenue.As IoT-sourced data often comes with nominal overhead costs, this new revenue stream could have the same impact on net income as increasing traditional product revenue by 17.0%.Not many businesses can create that kind of impact through traditional growth channels.

Moreover, companies like Amazon, Google, and Facebook empower rapid innovation by facilitating information exchanges between an ecosystem of interdependent groups. Data flows freely from a central hub to every group in these global juggernauts, driving innovation and efficiency in processes, sales pipelines, products, and more. This level of data fluidity is the foundation of IoT success because it allows all enterprise data to be leveraged for the greater good of the company.

Data analysis and distribution throughout your organization creates a true connected ecosystem, the pinnacle of IoT efficiency. Read about how to cross the connected chasm here.

Drive Unprecedented Collaboration

Most people think of IoT transition as a technical challenge, and it is. But most IoT transitions don’t fail because of technology alone. They fail because of people.

IoT crosses the boundaries between departments—and that doesn’t always turn everyone into happy campers. Success requires close collaboration across strategy, product, industrial design, experience design, mechanical engineering, data science, engineering, and more. But cultural disconnects between teams can create significant barriers in product development. Hardware and software teams, for example, have competing ideologies – the former lives by a mantra of ‘measure twice, cut once’ because of the high cost associated with hardware development and manufacturing, while software teams often strive for a ‘ship now, iterate later’ approach.

Without clarity of leadership, responsibilities, respect, and vision, these teams may not foster the communication necessary to succeed in IoT. The key to success is engaging the highest levels of the organization through the process so that everyone involved has the air cover to step out of their comfort zones. Because these kinds of institutional changes can be uncomfortable. With clear support throughout the entire organization, the transitional road bumps can return to being a technical challenge, not a human one.

Inoculate from Corporate Antibodies

Source: Nasa.gov

Corporate anti-bodies are the organizational forces that push for the safety of mediocrity and the predictability of a company’s decline over any measure of risk. In the eyes of a corporate anti-bodies, unpredictable growth is worse than a measured predictable decline. And they will strive to deliver IoT transitions to an early grave.

Corporate anti-bodies thrive on the fact that IoT is confusing for many executives. Alternating between doubt and impatience with IoT initiatives, corporate anti-bodies return the organization to the safety of the status quo—even when staying the same means that competitors dominate new revenue streams and markets.

Inoculating IoT initiatives requires an organizational strategy that evolves as the initiative moves from strategy to solution design to prototyping to piloting to commercialization.Executives must demonstrate leadership in the face of uncertainty to prove out business models that may require reworking later.

It's time to get innovating

As the next technology wave, IoT must be a critical element of corporate strategies and must be on the C-Level agenda to support and drive.Today’s connected world will drive changes outside your organization that will move exponentially faster than the mobile revolution, so any corporate vision without IoT is incomplete and brings significant risk with it. Being mindful of these 4 imperatives helps you plan and execute an IoT strategy that not only delivers on business success – they can also help you clear the way for quicker adoption and greater creativity.